ASA Adjudication on Ebuyer (UK) Ltd
Ebuyer (UK) Ltd
Off Ferry Road
19 September 2012
Internet (sales promotion)
Number of complaints:
Summary of Council decision:
Two issues were investigated, both were Upheld.
Claims on the www.ebuyer.com related to a hard drive. Text included "£90.03 inc. vat … Save £77.96" and the text "£167.99" was crossed out. The ad included two tick boxes labelled "Add 2 year warranty £14.99 Add 3 year warranty £19.98".
The complainant challenged whether:
1. the savings claim was misleading and could be substantiated; and
2. the ad misleadingly implied that it was necessary to pay extra for a warranty beyond one year, whereas he understood a three-year warranty was included.
CAP Code (Edition 12)
1. Ebuyer (UK) Ltd (Ebuyer) said hard drive prices had more than doubled in the six weeks between 1 October and 14 November 2011 following floods in Thailand. Half of Thailand's production capacity, which had previously accounted for 40–45% of worldwide hard drive production, was impacted. They sent news articles related to that and said average selling prices increased by over 150% during the same period, which equated to an increase of 5.4% per day from £43.29 to £109.78 overall. The said prices of the most popular hard drives had previously, from May 2011, remained very consistent and had an average lowest price of around £44. They said prices continued to be high and submitted invoices related to the hard drive previously being sold.
2. They said the warranties were not forced on customers but were offered optionally as additional protection against accidents and failures. They said all products could be added to the basket with or without the warranty option being selected; it was not ticked by default and therefore consumers would need to make the active decision to add it. They said the warranty could also easily be removed from the basket if a consumer chose to add it but then changed their mind.
The ASA noted the invoices submitted by Ebuyer, which related to only two transactions and were from around six months before the ad appeared. We noted that the prices for the hard drive, before VAT, were £165.27 and £179.59. While the prices when VAT was added were both higher than the advertised 'was' price, we were concerned that we had not seen evidence that related to more recent transactions and showed the product being sold at the price stated in the ad. Because we had not seen evidence to demonstrate that the 'was' price of £167.99 was a genuine previous selling price and that the advertised saving of £77.96 was therefore genuine, we concluded that the savings claim was misleading.
On this point, the ad breached CAP Code (Edition 12) rules 3.1 (Misleading advertising), 3.7 (Substantiation) and 3.17 (Prices).
We noted the ad provided the option to add either a two- or three-year warranty, which we considered was likely to be interpreted as suggesting any warranty included with the product was shorter than that. We understood the hard drive came with a three-year warranty included, however, and therefore considered the ad misleadingly implied that it was necessary to purchase an additional warranty when that was not the case. We concluded that the ad breached the Code.
On this point, the ad breached CAP Code (Edition 12) rules 3.1 and 3.3 (Misleading advertising).
The ad must not appear again in its current form. We told Ebuyer not to make savings claims in future unless they were in a position to demonstrate that they were based on genuine previous selling prices. We also told them to ensure they did not in future imply it might be necessary to buy extra items that were already included with the advertised product.